If State Bank of India or SBI fixed customers seek consistent monthly income, they might choose the SBI annuity deposit plan provided by the country’s biggest commercial bank.
In accordance with this plan, a depositor receives the same interest rate that is provided to term depositors during the tenor that the investor selects.
Therefore, the distribution of the maturity amount is the primary distinction between the SBI FD and SBI annuity deposit schemes.
In an SBI FD, the depositor must make a single deposit and get a single maturity payment at the end of the term.
In contrast, in an SBI annuity deposit plan, the depositor must make a single deposit and receive equal monthly payments throughout the tenor of their choice, plus interest.
According to onlinesbi.sbi, the official SBI website, what does an annuity deposit scheme mean for an SBI depositor is as follows:
“In accordance with this plan, a customer deposits a lump sum amount that is repaid to the customer over time in equal monthly instalments that include both the principle amount and interest on the decreasing principal amount.
The programme allows customers to receive a predetermined monthly amount against their initial investment. Payment will begin on the month’s anniversary.
It will be paid on the first day of the next month if the date is not present (29th, 30th, or 31st).”
According to the SBI website, there are some differences between the SBI FD and SBI annuity deposit scheme “In a fixed deposit account, the customer makes a single deposit and receives the maturity amount on the maturity date, which includes principal and interest for STDRs and principal only for TDRs because interest is paid on a periodic basis.
One-time deposits are accepted for annuity deposits, and the money is paid back to the client in equal monthly amounts over the duration they choose, plus interest.
” Thus, in SBI As part of the principal and interest on lowering principal are paid in increments over time with an annuity deposit, the maturity amount is zero at the time of maturity.
SBI annuity scheme: Minimum and maximum deposit
The minimum deposit needed to get $1,000 every month for five years is 60,000, which will be returned to the depositor in equal monthly payments along with interest.
The maximum amount limit for fund transfers inside one’s own account will also apply to Internet Banking.
SBI annuity deposit scheme interest rate
Annuity depositors will get returns on their investments in accordance with the terms of their chosen term deposits.
TDS rules on SBI annuity deposit scheme
The payment of interest is subject to the TDS on the annuity deposit. The final annuity payment may vary since the interest amount is calculated using the lowest rupee value available.